Evergrande On The Brink Of Bankruptcy, How Crypto Impacts?

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2021-11-24 06:41:30

Billionaire Ray Dalio Invested in Bitcoin

Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater Associates, has changed his mind about Bitcoin over the years. His recent statement gives a good and remarkable view of BTC and crypto.

He believes that the most dangerous thing for Bitcoin is its success. When BTC succeeds, governments will want to suppress and kill Bitcoin.

However, Ray Dalio also recognizes bitcoin as a good alternative to cash. He thinks that BTC is a store of value like gold. At the same time, he also switched part of his investment from gold to own a small percentage of crypto in his portfolio.

Ray Dalio has also believed that BTC will grow and possibly succeed. His investment in BTC will have a certain influence on the view of other investors in the market. Starting from a small number, he will be interested and learn more to have more investment opportunities later.

Regarding the fact that BTC can be suppressed by the government, in fact, over 10 years of Bitcoin’s development, the government can only intervene in certain areas. Like China suppressing miners or interfering with exchanges. But as the general trend of fiat currency is losing ground, assets like crypto are still a long-term uptrend.

Ray Dalio’s worries about a day when too successful BTC will be suppressed are his personal views. But in fact he believed BTC would succeed and invested part of his fortune in this digital currency. The belief that BTC is more of a store of value than a means of payment and a digital gold is growing stronger.

Bitcoin is predicted to reach a price of 500,000 USD

After the US, Britain also announced that August rose faster than at any time since the Bank of England gained independence in setting interest rates, increasing 1.2 percent to 3.2. %, the highest level since 2012.

An unexpected increase will undermine the Central Bank’s view that price increases are manageable and temporary. After the printing of money pushed into the governments of countries, inflation has occurred and is expected to continue to increase for many more years.

Rising inflation, depreciating fiat money have caused a series of other assets to grow year by year. Bitcoin is also one of them.

The strong growth of BTC over the years has made it an asset of choice for a store of value investment. Ark Invest CEO Cathie Wood also said that she believes bitcoin will be able to grow to $500,000 in the next five years. She said that as long as companies currently invest 5% of their capital in BTC, BTC can completely reach the price. At that time, the BTC capitalization will be equivalent to the current gold market capitalization.

Not only that, Cathie Wood also believes in Ethereum and promotes investment. And her firm’s trend is to gradually shift its crypto portfolio to 60% BTC and 40% ETH. Ethereum remains the top altcoin with large institutional investors.

According to statistics shared by Coinshare, until August 13, the next week, the investment group reported that they added $57 million in capital into the crypto market. Overall, the portfolio into BTC and ETH is currently the largest. But we also see the investment cash flow during the week with strong growth in some altcoins such as SOL, ADA, XRP.

Comments around Evergrande

In recent weeks, Chinese property giant Evergrande has warned of its cash crunch, listing its total liabilities at $300 billion and saying it could default if it can’t raise funds. quick money.

The company has previously sought to reassure the public about its business. It said recent internet comments about the company’s instability “are completely untrue”.

To date, Evergrande has had to acknowledge its difficulty in finding buyers for its properties to raise capital. Some information said that the amount of this company is not even enough to pay for interest in the next few weeks. These uncertainties have caused hundreds of investors to gather to protest in front of this company’s headquarters.

Evergrande borrows not only from small investors but also many large banks in China, Hong Kong, Australia, the UK or even the US. Therefore, if Evergrande goes bankrupt, it will lead to a series of large banks that may suffer losses or worse, the risk of bankruptcy.

Along with that, Evergrande also owns a huge amount of real estate. If they go bankrupt, it will lead to liquidation and sell-off of real estate, leading to unstable Chinese property prices and a down market. It will affect a range of other industries in the country and that includes the stock market.

Small investors who are investing in Evergrande’s apartment projects will also have their capital buried because the company has to stop works to preserve capital.

The Evergrande corporate event is being talked about in two directions.

Some say that Evergrande may go bankrupt and the consequences are similar to Lehman Brothers. The bankruptcy of the major US bank – Lehman Brothers led to the 2008 global financial crisis. Globally related companies also defaulted or suffered severe losses, stocks fell, investors exited. venture capital sectors. If this happens, global finance could also be affected and crypto assets will also be adversely affected.

In case two, the Chinese government will intervene and rescue companies, printing money to pump into the market. This will help avoid the short-term and long-term bankruptcy consequences of inflation. Leads to assets that will increase in price including BTC and crypto.

Adam Cochran compared Evergrande’s $300 billion in debt to the entire GDP of countries like Ireland, Denmark, Hong Kong or Portugal. This is not a small number.

However, the bankruptcy event of Lehman Brothers in 2008 of nearly $ 700 billion at that time was very large. Secondly, banking is an industry closely related to many other industries in the economy, so its consequences will be much bigger than real estate.

Therefore, Thuan thinks that the Chinese government will help to avoid Evergrande falling into bankruptcy. Governments, including the US, have realized that they should not let large companies go bankrupt because of the huge consequences behind.

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